Wednesday, May 28, 2008

Oil Stocks Look Like They Found Short-Term Support

Let's start off with some oil charts. First is several ETF's representing this sector. All of these bounced off of support levels today and in the big picture, I have to admit that the "selloff" in this sector has so far looked very orderly. If this sector was truly topping, which I admit I though it was last week, I would expect much heavier selling with much higher volatility. I would expect charts that look like DRYS or TBSI. So far, I don't see any of that, so perhaps I was early in my prediction. Oil inventories come out tomorrow and I think that will likely move these stocks - I just don't know which way.

DBE, XOP, XLE, OIH

Some of the oils haven't rested at all, but instead just keep going higher.

CLR, WLL, BEXP, ROSE

Several oil stocks put in very strong bullish reversals, closing way off their morning lows, although the volume picture is mixed in these stocks.

ARD, SU, NXY, EGY

Here are some of the oils that bounced off their short-term 9 day moving average today. These stocks still look very strong.

EAC, CPE, PXP, PXD

Here are some that bounced off the 20 day moving average. These for the most part look strong after today as well.

ECA, FST, CNQ, SM

Some oils have pulled back to the 50 day moving average but have seemed to get support at this important level.

ATLS, CHK, APA, CRZO

All charts from Telechart2007, Courtesy of Worden Brothers, Inc.

Based on the current action, I may even consider going long some of these stocks in the near future, but I will likely wait until the inventory news comes out tomorrow before covering my two shorts or going long in any of these stocks. It is still possible these pullback further, but I have definitely grown less confident in that possibility for this sector after today.

The market is painting quite a mixed picture right now. The indexes have held some support levels, but then again, the Nasdaq is possibly developing a small head and shoulders pattern. Some sectors and stocks are working, and some sectors and stocks are still getting killed. My guess is that we are still in the middle of an oversold bounce right now, but I have to admit that I found more good looking charts in my scans tonight than I have for about a week(shown below - keep an eye of MXB, ATVI, and STEC as possibilities on the long side as well). I also found virtually no charts that look like good shorts to me. Based on that, I have to consider the possibility that this bounce goes higher than I perhaps expected. At the same time, the commodity stocks definitely perked up today, and I don't think this market can run much higher than it already is if the oils and others are going to run right back up to new highs after a brief pullback. Sorry, but I just don't see oil and the overall market heading higher at the same time any longer. What to do, what to do?

AIMC, KWR, DCI, HIMX

ABAX, AUTH, IPGP, CVLT

VLNC, MA, CYD, CLS

All charts from Telechart2007, Courtesy of Worden Brothers, Inc.

Based on what I see, my game plan is still to keep things close to the vest and not make any really big moves on either side of the market. I know that's boring, but I still can't see an obvious edge that can be taken advantage of right now - there are just too many questions on both the bullish and bearish side of this market to make any large bets. Based on the charts I found tonight, I may poke at a few longs for short-term swing trades, but I will keep my stops very tight, because I have a feeling any breakouts in this environment could reverse just as easily as they broke out. I also won't be shorting any time soon - I don't think it's quite the right time yet. I haven't made any trades this week besides getting stopped out of CF today, and I have a feeling that may continue for the rest of the week until things become a bit clearer. Best of luck Thursday. Back to the hockey game.

Overall Market Timing Score

March 20, 2014 -2March 19, 2014 +1(Max Score +6, Min Score -6)

The Market Timing Score has six factors that I record on a daily basis. These include breadth indicators, moving average indicators, accumulation and distribution indicators, and overbought and oversold indicators.

The max score of the Market Timing Score is +6, but this is very rare. Typically a score of +4 or +5 tells you that the market is very bullish. A score of +3 or +2 tells you that the market is bullish, but there are a few reasons for concern. A score of +1 or 0 tells you that cash is the best place to be. The scores work the exact same way on the negative side for bearish markets.

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Chart Swing Trader is a website intended for the education of online stock traders. The website is an information service only. The information provided herein is not to be construed as recommendations to buy or sell stocks of any kind. They are simply the opinions of the author. It is possible that the editor of this blog may own, buy, or sell stocks presented. All investors should consult a qualified professional before trading any stock. The author is not an investment advisor. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts made by the author are committed at the reader's own risk, financial or otherwise.